The risks behind fundraising regulation

At times it feels like being a charity chief executive is as attractive a career as being a banker or MP. Every day there’s a new story in the press highlighting bad practice or poor judgement. Then we have to justify the fact that yes, we do have paid professional staff whose job it is to get people to give us money so that we can provide services and serve our charitable purpose.

Bobath Scotland is a relatively small charity. Our purpose is to help people in Scotland living with cerebral palsy and we employ 16 people, which includes a team of highly specialist clinical therapists. We are not particularly well known and despite cerebral palsy being the most common cause of physical disability in children in the world, we are not top of people's mind when they choose which cause to support. The maths is simple: the more money we can raise, the more people we can help.

Stephanie Fraser

What worries me most about the proposed new regulations for fundraising are the extra costs we would incur to make sure we comply with the new regime

We aim to plough as much funding as possible back into benefiting our recipients and to be transparent about how we raise and spend our funds. Over 80% of our income each year has to come from private sources, and it gets harder and harder to generate. But how can I expect funders to support us if, firstly, I haven’t put forward a compelling case for why they should; and secondly, I’m not open and honest about how we will spend their contribution?

What worries me most about the proposed new regulations for fundraising are the extra costs we would incur to make sure we comply with the new regime. We will need to look at any increased reporting requirements as costs could be incurred in registering with the Fundraising Preference Service (FPS) or through a levy to register in Scotland. We’re not clear on how we would access the FPS and to whom it will apply. Presumably, because we spend more than £100,000 on fundraising (last year our total fundraising costs were £124,000), we will fall into the regulatory net. I am hopeful that any change will come with a suitable lead-in time to let us ensure our systems are fit for purpose.

We strive to ensure that our records are up-to-date. The changes to Gift Aid regulations over recent years have meant that keeping pace with requirements is just part of life in the fundraising team.

However, I am not yet clear how we will manage the difference in communications that are sent out to service users and to donors (given that many people may be both).

If there is a re-set button imposed on communication, how will this affect things like newsletters that we send out to families which may contain a fundraising element, as well as updates on services and general charity news?

Will we have to keep a record of what kind of opt out people have signed up to? Will we have to develop a menu for people to identify which communications they are happy to receive?

We don’t employ a dedicated database manager, but I suspect that should any of the above become compulsory then we would have to look at increasing our staffing levels to cope. All this will require time to develop, inevitably turn some people away and cause us more expense to deliver.

As a donor to charity myself, I sympathise with the general feeling of malaise that has got us into this situation, especially as it seems some charities treat their supporters simply as income generating commodities rather than people. My moral compass when making decisions for our charity tends to be: “would I be happy if this was front page? Could I stand up and defend this action?” It is depressing for those organisations who strive to get things right, with a small staff team and a tight budget, that we risk failing to comply with new and complicated regulations through lack of budget or expertise rather than intent.

73% of Scottish charities have no staff and are entirely volunteer run. Compliance, costs or the demands of regulation should be suitable to the scale of the organisation and its fundraising. If we over regulate beneficiaries will suffer. If we get it right then donors can be confident that bad practices are not tolerated and charities will continue to have meaningful dialogue with all interested parties – be they donors, potential donors or beneficiaries, and being a charity chief will continue to be one of the most rewarding jobs anyone could wish for.

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.